WORLD TRADE  
ORGANIZATION  G/SCM/Q2/NAM/2 
22 October 2010 
 (10-5501) 
Committee on Subsidies and 
Countervailing Measures Original:   English 
 
 
 
SUBSIDIES  
 
Replies to Questions Posed by the UNITED STATES1 
Regarding the New and Full Notification  
of NAMIBIA2 
   The following communication, dated 21 October 2010, is being circulated at the request of the Delegation of Namibia.   
 
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I.  INCENTIVES FOR MANUFACTURERS 
 
Question 1   Namibia's notification states that "the ob jective of these incentives is to stimulate 
manufacturing in Namibia and to promote exports into the region and to th e rest of the world".  
The notification also states that the incentiv es are provided to all manufacturing enterprises 
which "meet the conditions as set out by the Namibian Government".  The Annex to the 
notification describes those conditions as "Applic ation to the Ministry of Trade and Industry 
and approval by the Ministry of Finance".    
• Please describe the criteria used by the relevant Ministries in approving applications.  
How do the criteria differ from the other two programs in the notification? 
 
Reply
 
  The manufacturing activity of the company con cerned must be beneficial to the Namibian 
economy in terms of employment creation, valu e addition, replacement of imports (import 
substitution) or lead to an increase in exports.  An investment in new manufacturing activity could 
also be considered as a criterion in the approval pr ocess.  The criteria used in the approval process are 
essentially the same for all thr ee programmes, although the incentives provided differ from the 
three programmes.   
Question 2 
 
• Please describe whether and ho w an increased ability to comp ete in export markets is 
considered in the approval process. 
                                                     
 
1 G/SCM/Q2/NAM/1.   
2 G/SCM/N/186/NAM.   G/SCM/Q2/NAM/2 
Page 2  
 
  Reply
 
  The ability to compete in the export market is not a consideration in the approval process.   
 
II. INCENTIVES FOR EXPORTERS OF MANUFACTURED GOODS 
 
Question 3 
  Namibia's notification states that "the obj ective of these incentives is to promote exports 
into the region and to the rest of the world".  Th e notification also states that the incentives are 
provided to all manufacturing exporters who "meet the conditions as set out by the Namibian 
Government," while the benefit is described as  a tax exemption on 80 per cent of income 
derived from exporting manufactured goods.  The Annex to the notification describes those conditions as "Application and approval by the Ministry of Finance".    
• Please describe the criteria used by the Minist ry of Finance in approving applications.   
 
Reply
 
  Same reply as to Question 1 above.    
Question 4 
 
• The benefits available to enterprises under th is program appear to  be contingent upon 
export performance.  Please discuss this pr ogram is context of a Member's obligations 
under Article 3 of the Subsidies Agreement.   
 
Reply
 
 
 The benefits available to enterprise under this programme are NOT contingent upon export 
performance and thus not in violation of Article 3 of the Subsidies Agreement.  The benefits are 
provided to enterprises that export and aimed at stimulating manufacturing and increasing the number 
of products exported from Namibia.   The actual performance of the entity in the export market is not a 
consideration in the approval process.  The footnote  under Article 3 of the Subsidies Agreement states 
that the mere fact that a subsidy is granted to a co mpany that exports shall not for that reason alone be 
considered to be an export subsidy with in the meaning of this provision.   
 
III. EXPORT PROCESSING ZONES 
 
Question 5   Namibia's notification states that all enterprises "which undertake manufacturing, assembly, repackaging and break-bulk operation fo r export-oriented activities are eligible for 
Export Processing Zone (EPZ) status".  Accord ing to the notification, EPZ enterprises are 
exempted from corporate income tax, duties a nd VAT on imported intermediate and capital 
goods for manufacturing purposes, certain other transfer taxes, and are eligible for certain 
grants and rental programs.    
• Please describe the criteria used by the relevant Ministries in approving applications.    G/SCM/Q2/NAM/2 
 Page 3 
 
 
  Reply  
  Same reply as to Question 1 above.   
Question 6 
 
• The incentives that are available to enterpris es that qualify for EPZ status appear to be 
contingent upon export performance.  Plea se discuss this program in the context of a 
Member's obligations under Article 3 of the Subsidies Agreement.   
 
Reply
 
 
 Same reply to question 4 above. 
 
  
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